what acquirers need to know about new pharmacy and … presentation - a... · what acquirers need...

A Prescription for Heavy FinesWhat Acquirers Need to Know About New Pharmacy and Designer Drug Regulations

MAC is an organization of Bankcard professionals involved in the risk

management side of Card Processing. We have members from Banks, ISOs,

Card Associations and others related to the risk management side of the

industry. MAC’s mission is to strengthen the payment ecosystem through

ongoing education, communication and cooperation among acquirers, card

brands and enforcement agencies.

To learn more about MAC or to become a member of MAC

please visit the website below.

https://www.macmember.org/

https://www.macmember.org/

TODAY’S PRESENTERS

Martin HoogendijkSenior Analyst, Certification Program Lead

LegitScript

Michal ConleyProgram Manager, Merchant Monitoring Solutions

LegitScript

AGENDA

4

• New Rules: What Changed?

• Certification for CNP Pharmacy Merchants

• Designer Drugs Explained

• Tips for Protecting Your Portfolio

1

2

3

4

WHAT CHANGED?NEW RULES FOR ACQUIRERS

WHAT CHANGED?

Acquirers with CNP pharmacy merchants must:

NEW RULES

Unlawful Sales of Prescription Drugs/Pharmacy-only Medicines

• Ensure new and existing merchants have certification

from a recognized third-party organization

• Provide ongoing monitoring of these merchants by a

recognized third-party organization

In general, an attorney

or other legal advocate

retained by the merchant

will not meet the

requirement of

impartiality.

1

Recognized organizations:

“

”Visa Global Brand Protection

Program Guide for Acquirers

WHAT CHANGED?

Acquirers must ensure transactions are not entered into the

payments system by merchants who sell designer drugs

NEW RULES

Sales of Designer Drugs is Prohibited

• Designer Drugs

• Synthetic Cannabinoids

• Synthetic Cathinones

• “Research Chemicals” or “Research Kits”

• Herbs or Botanicals used for Psychoactive Effects

2

Visa considers the sale

of designer drugs to be

brand-damaging and

includes them as a

violation category in the

GBPP.

“

”Visa Global Brand Protection

Program Guide for Acquirers

CERTIFICATIONFOR CNP PHARMACY MERCHANTS

INTERNET PHARMACY MARKET

HEALTHCARE MERCHANT CERTIFICATION

96% 33%WEBSITES FAIL

TO MEET LEGAL

REQUIREMENTS

MERCHANTS

FAIL TO MEET

LEGAL

REQUIREMENTS

SOURCE: The Internet Pharmacy Market in 2016 (LegitScript)

2,000-3,000 merchants are selling prescription drugs

on 30,000-35,000 websites at any one time.

CERTIFICATION

Healthcare Merchant Certification provides a recognized way to

ensure that merchants selling or advertising medicines,

pharmaceuticals, telemedicine, or related healthcare services are:


• Complying with applicable laws regarding the sale and

distribution of pharmaceuticals

• Not exploiting remote mechanisms in a way that violates

domestic and/or foreign laws

• Card-Not-Present Pharmacies

• Telemedicine Providers

• Wholesale Distributors

• Price Comparison Websites & Apps

• Discount Websites & Apps

CNP Pharmacy Merchants

HOW IT WORKS


APPLICATION REVIEW DETERMINATION CERTIFICATION MONITORING

Pharmacy

completes

application form

Recognized third-

party conducts

thorough review

Determination is

made based upon

review findings

Approved pharmacy

merchant receives

certification

Ongoing

monitoring is

required

1 2 3 4 5

legitscript.com/certify Approval Status = Certified

DOES IT WORK?


Chemist4U

• Internet pharmacy based in the UK,

licensed to serve UK customers.

• BUT also ships medications to other

countries, including the US, where the

pharmacy is not licensed to do so.

• May be eligible for probationary status

if all problems remedied.

Denied Certification

DOES IT WORK?


Mint Rx

• Latisse is prescribed just on the

basis of an online questionnaire

(not a valid method of prescription).

• Doctors are also not licensed in the

states where the drug is being

shipped to.

Denied Certification

DOES IT WORK?


curology.com

• Physicians are properly licensed in

the states where they offer

telemedicine.

• Services include store-and-forward

technology and other forms of

follow-up care.

Certified Telemedicine Provider

DOES IT WORK?


St. Peter’s Community Pharmacy

• Pharmacy serving the local

community in St. Peter’s, Missouri.

• Service includes online requests for

prescription refills and home

delivery for local patients.

• Website includes LegitScript

certification seal.

Certified Pharmacy

CERTIFICATION BENEFITS

• Avoid fines and regulatory risk (e.g., from FDA or DEA)

• Quickly underwrite and safely onboard high-risk CNP

pharmacy merchants that meet Visa requirements

• Opens up potentially untapped business opportunity with

trusted pharmacy merchants

• Widely recognized (Google, Bing, Yahoo, Facebook, etc.

advertising as well as Visa and MasterCard)


DESIGNER DRUGSEXPLAINED

DESIGNER DRUGS

More than 2,000 new

designer drugs are

estimated to be

introduced into the

marketplace each year.

SOURCE: The Internet Pharmacy Market in 2016 (LegitScript)

WHAT ARE DESIGNER DRUGS?

Designer drugs contain either

controlled substances or analogues

of controlled substances designed to

mimic the effects of the original drug.

DESIGNER DRUGS

• Synthetic Cannabinoids

• Synthetic Cathinones

• Research Chemicals

• Herbs/Botanicals for Psychoactive EffectsExamples

WHAT ARE THE DANGERS?

Designer drugs pose significant risk:

they can contain almost any

combination of chemicals in

unknown quantities.

DESIGNER DRUGS

• Heart attacks

• Insomnia

• Agitation

Examples

• Anxiety

• Delusions

• Hallucinations

• Muscle spasms

• Seizures

• Severe paranoia

• Aggression

• Psychotic symptoms

• Death

EXAMPLES

HERBAL INCENSE

• Synthetic cannabinoids are sprayed onto dried

plant matter, often to be smoked

• Some are sold as liquids to be vaporized and

inhaled in e-cigarettes and other devices

• Common brand names: Spice, K2, Scooby Snax

DESIGNER DRUGS

• Bright packaging

• “Not for human consumption” labeling

• “For novelty use only” labeling

Packaging Provides Clues

EXAMPLES

BATH SALTS

• A type of synthetic cathinone

• Usually takes the form of a white or brown

crystal-like powder

• Common brand names: Vanilla Sky, Cloud Nine,

White Lightning

DESIGNER DRUGS

• Bright packaging

• “Not for human consumption” labeling

• “For novelty use only” labeling


EXAMPLES

RESEARCH CHEMICALS

• Ingredients are often used to make designer

drugs

• Some ingredients are Schedule I controlled

substances

• All ingredients are intended for psychoactive use

DESIGNER DRUGS

• Simple bags or bulk powder

• Use of chemical structure illustrations

• “For research purposes only” labeling


TIPSFOR PROTECTING YOUR PORTFOLIO

PROTECT YOUR PORTFOLIO

• Ensure all of your CNP pharmacy merchants

are certified and monitored by a recognized

third-party (not the merchant’s attorney).

TIPS FOR PROTECTING YOUR PORTFOLIO

• Do not onboard a merchant who’s website

“Whois” is privacy protected without further

investigation.

Registrant is hidden


• Check to see if the merchant’s information is

consistent (e.g. TLD, email address, phone

number) with the country in which the

merchant is based.


• Look out for suspicious words contained

within the merchant’s URL (e.g. “CBD”, an

acronym for Cannabidiol.)

This phone number is in China

This address is in Italy


• Apply extreme caution to

merchants that accept

cryptocurrencies (e.g. Bitcoin) or

vouchers (e.g. Amazon, iTunes)

for payment on their website.



• Do not onboard a merchant with

a product catalog that states “not

for human consumption” without

further investigation.


• Check business bank

statements for merchants with

service descriptions that are

different to the service they

claim to offer.

QUESTIONS?LEARN MORE…

Get answers to the most common questions

acquirers are asking about these designer drugs

Visit: go.legitscript.com/MAC

[email protected]

(503) 764-9497

payments.legitscript.com

MAC 2018 Annual ConferenceMarch 13 - 15, 2018

SLS Hotel - Las Vegas, NVRegister online at www.macmember.org

SAVE THE DATE

http://www.macmember.org/

what acquirers need to know about new pharmacy and … presentation - a... · what acquirers need...

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